LNT profits grow 9.5%

Don Hogsett -- Home Textiles Today, April 22, 2002

CLIFTON, NJ — Boosted by new store openings and a modest lift in same-store sales, first-quarter profits at home furnishings retailer Linens 'N Things advanced by 9.5 percent, to $5.1 million from $4.7 million last year.

Sales climbed higher by 20.5 percent, to $456.9 million from $379.2 million last year, as the retailer opened seven new stores while closing two others. But stunted in a weak retail environment, same-store sales edged up by 2.6 percent. And the retailer said it expects same-store sales for the balance of the year to move up "in the low single digits."

The same-store sales number stands in sharp contrast to the hefty gains put up by rival Bed Bath & Beyond, whose same-store sales shot up in the same period by 11.9 percent.

Average gross margin held steady during the opening quarter at 39.7 percent, while gross margin dollars increased in line with sales, moving up by 20.2 percent, to $181.2 million from $150.7 million. Operating costs were virtually flat, inching up just 10 basis points, to 37.7 percent of sales from 37.6 percent a year ago.

For all of this year, the home furnishings superstore said it expects its sales to grow by 17 percent to 19 percent as it opens about 50 new stores. Earnings per share are forecast to grow at a rate of 15 percent to 20 percent.

During the recent first quarter, LNT somewhat slowed the rate of new store openings, putting seven new stores into operation, compared with 11 last year. But the pace should pick up later in the year, as the chain said it plans to open about 50 new units this year. During the current second quarter, new stores are slated for Englewood, CO; Chino, CA; Brewster, NY; Smithfield, RI; and Calgary, Alberta.